It's October, and sports fans are focusing on baseball's World Series. This year, the defending champion Los Angeles Dodgers face the Toronto Blue Jays in the fall classic.
The series represents not only the best of Major League Baseball's National and American leagues. This matchup also spotlights two of North America's largest, most valuable commercial real estate markets.
CoStar's analysts have stepped up to evaluate how Los Angeles lines up against Toronto for this year's real estate title. Both cities have suffered from high vacancies across office, industrial, retail, and multifamily property, hardly playoff material in the world of commercial real estate.
But which market holds the edge in recent property performance, and how do they look heading into the off-season? Here are the scorecards:
Multifamily
Los Angeles: The Los Angeles apartment market has experienced a deceleration in activity this year yet continues to perform favorably relative to national trends. Though vacancy rates have reached a decade high (excluding 2020) at 5.4%, Los Angeles maintains one of the lowest vacancy levels nationwide. Demand this year has remained consistent with historical averages; however, increased supply is largely responsible for the uptick in vacancies. Over the past 10 years, the market has added approximately two units for every one renter, resulting in oversupply and limited rent growth. But new construction starts have tapered off, which will moderate the supply pipeline and allow demand to keep pace. Nonetheless, elevated unemployment, subdued job growth and population decline remain key challenges that could hurt future demand.
Toronto: Toronto's multifamily market remains critically undersupplied, but affordability is now an even bigger concern. Record population growth drove unprecedented rental construction starts in recent years, helping to alleviate the tightness. However, limited wage growth and a slowing economy have limited the pool of renters able to afford Toronto's record-high rents. Population growth is now easing, and as rental rates adjust, affordability is expected to improve, allowing supply to eventually align with demand.
Advantage: Los Angeles
Office
Los Angeles: The Los Angeles office market is experiencing significant challenges, with vacancy rates remaining high at 15.9%. Entertainment and tech have been largely inactive in leasing due to contractions and layoffs, though trailing year occupancy loss has tapered to 1.9 million square feet. Office attendance remains below the national average, with employers using hybrid work models, prompting organizations to reduce their footprints and downsize leases. As a result, rent growth is negative, now at -0.4%. Most developers have paused office projects as the market assesses how best to address its persistent structural vacancy. Many older buildings are vacant and facing diminished demand, leading some developers to repurpose these spaces into residential units. Over the past year, the demolition or conversion of more than 2.4 million square feet of obsolete office space helped limit vacancy expansion.
Toronto: Toronto's office market faced prolonged pressure as pandemic-driven shifts to hybrid and remote work reduced demand. Occupancy declined 2.6 million square feet in the past year, though recent quarters have shown signs of a recovery. Return-to-office mandates from major banks and the provincial government are fueling a solid upturn in leasing activity. At the same time, the final wave of megaprojects, initiated during the pre-COVID demand period when vacancy rates were at all-time lows, will wrap up by year-end, bringing an end to the steady influx of new supply that has elevated vacancy. Headline rental growth remains modestly positive, and early indications suggest net effective rents in the downtown core are beginning to rise again, especially in new towers.
Advantage: Los Angeles
Industrial
Los Angeles: Once a perennial all-star, the Los Angeles industrial market suffers from a three-year slump in demand that has moderated but continued through 2025. Space availability has risen to 8.2%, reaching levels unseen in over a decade and leading investors to slash market rents substantially. Across all North American and European markets, rents have only declined more severely over the past year in California's Inland Empire, adjacent to LA, and in Montréal, Canada. Container shipping pricing trends indicate imports could moderate through 2025, but don't count out the possibility of LA eventually returning to form. Leasing activity has ramped up again, and only 4 million square feet of supply is under construction, a minuscule amount for a market containing nearly a billion square feet of existing supply.
Toronto: As one of the largest and tightest logistics markets in North America, Toronto has recently seen a wave of speculative new construction of large bay warehouses. However, many of these buildings are now coming to market at a time of heightened business uncertainty, principally due to the North American trade war, but also from a normalization of demand following the pandemic. This has resulted in an increase of available product and a softening of record-high rent levels over the past year. However, a structurally constrained supply pipeline, due largely to regulatory reasons, suggests that the market could quickly return to balanced conditions by next year, especially if trade tensions between Canada and the U.S. recede.
Advantage: Toronto
Retail
Los Angeles: The Los Angeles retail market is experiencing elevated vacancy rates and low demand. More than half of the city's retail inventory was constructed before 1980, with most current availabilities found in these older properties. Closures of underperforming national retail locations have contributed to increased vacancy, especially for mid-sized spaces. The vacancy rate is 5.9%, the highest recorded to date, although it's only increased by 34 basis points in the past year. Economic basics have slowed consumer spending and limited retailer expansion in Los Angeles. Rent growth is currently negative, though restricted new supply may help improve market conditions over time.
Toronto: With population growth easing, a slowing economy and major department stores like Hudson's Bay Co. shutting down across Canada this spring, retail vacancy has expanded notably for the first time in nearly a decade, up 100 basis points in the past year. Rent growth has moderated because of the vacancy expansion and loss of tenant occupancy. Nevertheless, market conditions are still tight for retailers, with vacancy trending slightly above 2%. Demand for grocery-anchored properties has remained more resilient, and supply pressures are limited, which should help prevent vacancy from climbing much higher.
Advantage: Los Angeles
Final tally
Winner: Los Angeles